Question

1-)Please refer to the following information for Peartree Company: • Common stock, $1.00 par, 100,000 issued, 95,000 outstanding • Paid-in capital in excess of par: $2,150,000 • Retained earnings: $910,000 • Treasury stock: 5,000 shares purchased at $20 per share If Peartree resold 1,000 shares of treasury stock for $24 per share, what journal entry would be required?

A) Debit Cash $24,000 and credit Treasury stock $24,000.

B) Debit Treasury stock $24,000 and credit Cash $24,000.

C) Debit Treasury stock $20,000, debit Paid-in capital $2,000 and credit Cash $24,000.

D) Debit Cash $24,000, credit Treasury stock $20,000 and credit Paid-in capital $4,000.

2-)Which of the following is a common reason for companies to retire preferred stock?

A) To stop paying out dividends to preferred shareholders

B) To increase stockholders' equity

C) To reward the preferred shareholders

D) To make a profit on the retirement of preferred stock

3-)At January 1, 2014, Foxmore Company had 80,000 shares of common stock outstanding and no preferred stock. During the year, they issued 40,000 additional shares of common stock. At December 31, 2014, Foxmore had 120,000 shares of common stock outstanding, and no preferred stock. In addition, Foxmore reported the following results for the year 2014: Sales revenues from regular business operations $3,000,000 Cost of goods sold 900,000 Operating expenses from their regular business operations 600,000 Gain on disposal of several items of property, plant & equipment 15,000 Income tax expense on continuing operations 330,000 Loss on the termination of a discontinued business segment, net of tax 120,000 Losses on damage caused by earthquake, net of tax 280,000 At December 31, 2014, how much is the earnings per share for income (loss) from continuing operations? (Please round all calculations to the nearest cent.)

A) $(1.20)

B) $10.65 C)

$7.85

D) $11.85

4-)) A corporation has net income of $365,000 for the current year. It paid its required preferred dividend of $17,500 and had no other stock transactions during the year. The average number of common shares outstanding during the year was 69,500. What is the earnings per share?

A) $1.00

B) $4.37

C) $5.84

D) $5.00

5-)Qtopia Company uses the direct method to prepare its statement of cash flows. It has reported sales revenues of $100,000 on its income statement for the year 2012. If the balance in accounts receivable has gone up by $4,000 during the year, then $4,000 will have to be added to $100,000 to calculate collections from customers. True or false

6-)Qtopia Company uses the direct method to prepare its statement of cash flows. It has reported operating expenses of $21,000 on its income statement for the year 2012. If the balance in accrued liabilities has gone up by $1,000 during the year, then $1,000 will have to be added to $21,000 as part of the process to calculate payments to suppliers for operating expenses. true or false.

7-Please refer to the following information for Petra Sales Company: • Common stock, $1.00 par, 200,000 issued, 180,000 outstanding • Paid-in capital in excess of par: $1,600,000 • Retained earnings: $2,440,000 • Treasury stock: 20,000 shares purchased at $12 per share If Petra Sales sells 10,000 shares of treasury stock at $14 per share, the company will record a gain on the sale of treasury stock of $20,000. True or false

8- Public companies are required to publish financial statements, but privately held companies are generally not required to do so.true or false

Answer 1

Note: Although all given questions are separate & independent but I am answering first 4 questions.

(1).

Answer is option (D) Debit Cash $24,000, credit Treasury stock $20,000 and credit Paid-in capital $4,000.

Explanation;

Cost price of each treasury stock is given = $20

Selling price each treasury stock is given = $24

Thus at the time of selling following entry will be made;

Accounts Title & Explanation	Debit	Credit
Cash (1000 * $24)	$24000
Treasury stock (1000 * $20)		$20000
Paid in capital (1000 * $4)		$4000

(2).

Correct answer is option (A) To stop paying out dividends to preferred shareholders

Explanation;

As we know that preferred stock always carry a fixed burden of dividend payment so whenever a company have sufficient funds then it will retire preferred stock to stop paying out dividends to preferred shareholders.

(3).

Correct answer is option (D) $11.85

Explanation;

Earnings per share for income (loss) from continuing operations =

Total income (loss) from continuing operations / Average outstanding shares

Total income (loss) from continuing operations = $3000000 – $900000 – $600000 – $330000 + $15000 = $1185000

Average outstanding shares (80000 + 120000) / 2 = 100000 shares

Thus let’s calculate earnings per share for income (loss) from continuing operations;

Earnings per share for income (loss) from continuing operations = $1185000 / 100000 = $11.85

(4).

Correct answer is option (D) $5.00

Explanation;

Earnings per share =

Net income after preferred dividend / Average number of common shares outstanding

Net income after preferred dividend ($365000 – $17500) = $347500

Average number of common shares outstanding = 69500

Thus, Earnings per share ($347500 / 69500) = $5